The Details the Moguls Don't Want You to Know

EVERY TIME I THINK of the way that Hollywood handles its talent guild negotiations, I’m reminded of that scene in Jurassic Park 2 where Jeff Goldblum warns everybody: “Oooh, ahhh — that’s how it always starts. Then later there’s running and screaming.” That happened even before the writers went out on strike for 100 days. And it’s happening now to the actors.

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The Two Allens: SAG's Doug Allen and Alan Rosenberg want the moguls to get involved.

At first everyone was very polite and well-behaved when the secret confabs started many months ago between the Hollywood moguls and the Screen Actors Guild, soon after the striking Writers Guild went back to work. In late February, SAG national president Alan Rosenberg and national executive director Doug Allen had a meet-and-greet with Disney CEO Bob Iger. Then the guild duo agreed to confer again with Iger plus News Corp. No. 2 Peter Chernin (the pair credited with back-channelling their way to a WGA strike settlement).

This was exactly what SAG leadership had told members they would do: hold informal get-togethers with the moguls to lay groundwork for formal bargaining. But the March 3 sit-down didn’t go well. As a source told me, “When the SAG guys said they’re not going to accept the DGA or WGA deal and wanted to renegotiate DVDs and new media, Peter said, ‘Then I guess we have nothing to talk about.’”

Rumors immediately spread that the “two Allens” had blown it by being hotheads. SAG tried to set the record straight. “The tone and tenor is completely false. There was no hyperbolic rhetoric. Conversations were cordial and constructive.”

It was then that the Hollywood CEOs came to a collective decision about how to proceed with the SAG negotiations. Had the Big Media managers been interested in a quick settlement, they would have agreed that Chernin and Iger return to back-channel bargaining. Instead, the moguls decided to change up the way they would conduct the contract talks for Hollywood’s biggest union: They decided to hand the negotiations back over to their association, the Alliance of Motion Picture and Television Producers.

In other words, back to Nick Counter for his last hurrah as the cartel’s negotiator, and back to the studios’ and networks’ labor lawyers, who had grown increasingly restless for more control over the process. In fact, several moguls have admitted to me that, since then, they haven’t even bothered to read the memos that their labor lawyers file each week. “I told my people, ‘Don’t bother me unless there’s a breakthrough,’” one studio bigwig informed me.

The result is that Counter and this crew have been running every facet of the SAG-AMPTP negotiations, now stalemated. On Monday, the Big Media cartel made an 11th-hour “Last Best Offer” before SAG’s contract expired at 12:01 a.m. on July 1. But WGA exec director Dave Young had already informed his SAG counterpart Doug Allen that the AMPTP had done the same with the WGA, proposing “at least 10 last best offers” before a strike settlement was finally reached. SAG officials complained that the AMPTP offer looked like the AFTRA contract, but the screen actors agreed to examine it before the next negotiating session on July 2.

Expect more of the same tactics. One late April memo from a labor negotiator to his mogul boss warned, “We believe that if a deal can be made with SAG without a strike, the earliest we’ll conclude it will be July 15th.”

FRUSTRATED, DOUG ALLEN MET four weeks ago with Iger and CBS boss Les Moonves in the Disney honcho’s NYC office. They discussed issues like new media, product placement, clips consent for new media, and DVD residuals. But the moguls gave them a deliberate brushoff, according to both sides, along the lines of: “Guys, let the process continue. The CEOs are not going to get involved unless it's June 24 and everyone is close to a deal. Then they’ll roll up their sleeves. But they need to hear that or else they don’t plan on getting involved.”

Then AFTRA breezed through its talks with the AMPTP and reached a deal in a scant 17 days. It was déjà vu all over again, only this time AFTRA was playing the DGA’s doormat role and SAG the WGA’s leading man.

So the Two Allens went to visit the different moguls in their corporate enclaves. Once again, the SAG leaders’ requests for the Hollywood CEOs to get involved went nowhere. As one mogul condescendingly explained to SAG, Nick Counter’s crew is “the preferable way” of conducting negotiations. “That’s what their job is. This is not supposed to be done by us per se.”

Word leaked out to the media about SAG’s June 2 meeting at Sony Pictures Entertainment in particular, and a studio spokesman reacted, “There was a frank and cordial exchange of views, and we said how important it was to the industry that a deal be reached as soon as possible. And the best way to do that is by negotiating with the AMPTP, so we hope everyone’s energies can be focused in that direction.”

At Sony, Rosenberg and Allen sat down with Sony Pictures Entertainment chairman Michael Lynton, considered a moderate among the moguls, and Jean Bonini, seen as a militant among the labor lawyers. Among the points made by the Two Allens were their extreme disappointment that the moguls negotiated first with smaller AFTRA and left bigger SAG waiting in the wings. Lynton expressed disapproval at SAG’s intent to oppose the AFTRA contract. “Our view was that the best place to focus their energies would be in the AMPTP negotiations,” a Sony insider told me.

When told that moguls like himself refusing to get involved would prolong the de facto strike in Hollywood, not shorten it, Lynton turned angry and pounded the table with one hand, declaring, ‘Do you think I like having my production facilities idle?”

So it came as a huge surprise to SAG leadership when, on June 18, a story on the Variety Web site was headlined, “Chernin, Iger May Resume SAG Roles.” Doug Allen immediately left Iger a phone message asking whether this was an invitation. Iger called him back five days later and reiterated that the moguls were staying out.

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Iger and Allen had a prickly conversation. I’m told that Iger asked, “Why don’t you just take what the writers and directors took?” To which Allen responded, “Just because we’re the last ones at the table doesn’t mean we don’t get our turn at the table.”

There has been no mogul/Allens communication since, I’m told.

So right now the studios and networks claim to be counting on their AMPTP negotiators, even though, during the starting day of the AMPTP-SAG official negotiations, SAG sources told me that “the first thing that came out of Nick Counter’s mouth was, ‘These proposals are unreasonable. Well, I guess you’d better prepare for a strike.’”

All during the writers strike, the dilemma for the AMPTP had been the incessant murmuring throughout Hollywood of “Wait for SAG.” SAG is the most powerful Hollywood union — its members collectively earned more than $4 billion during the 2005–2008 TV/theatrical contract. Somehow the AMPTP had to undermine the union’s strength. The employers’ cartel found a willing and ambitious collaborator, AFTRA, whose earnings over the past three years on the same contract totaled only $40 million. (SAG contracts represent 99 percent, AFTRA just 1 percent.)

Whatever AFTRA negotiated or didn’t negotiate should have been a mere afterthought. Instead, the AMPTP and AFTRA claimed that the smaller union’s tentative deal should be the template for SAG in these negotiations. “On what planet?” a SAG insider bitched to me. “Well, one where AFTRA wants to undercut SAG rates and sell out actors to secure more jurisdiction. For all the cries that SAG is the ‘membership first’ guild, AFTRA’s weak deal makes it the producers’ choice. SAG really is the only true union actors have. The AMPTP’s strategy is to make AFTRA a low-cost union alternative.”

Of course, the moguls tell me they won’t exploit AFTRA’s new contract to give it preference over SAG for jurisdiction over new TV shows. Oh, puh-leeze. “I suppose we could. It’s doubtful. But it could happen. I don’t see us trying to stick it to SAG. But it is in our rights to do that,” one network honcho mused to me.

The AMPTP walked away from SAG in May in order to make a deal with AFTRA. When talks resumed, the AMPTP refused to even offer the WGA deal or the AFTRA deal. Instead, the cartel forced SAG to start at the beginning. Says a SAG board insider, “Doug and Alan are really just disappointed in these people that they’re truly are so juvenile. They’re not willing to even make the deal they made in the past. Why does the union submit to this process when it’s such a colossal waste of time?” Another SAG source gripes, “The employers have dragged everything out in order to slow the pace of negotiations while furiously dialing the media to background them on how the SAG team is not taking it seriously.”

SAG insists it has made concessions and will tweak some more. The biggest surprise came three weeks into the process when SAG agreed to withdraw its demand to double residuals from DVD sales and instead ask for what would effectively be a 15 percent hike in DVD pay. But SAG complains that the AMPTP has not made counterproposals. “Truly, they have not tried to negotiate at all,” a SAG board member gripes. “Obviously, their only job description is ‘Don’t make a deal.’”

WHILE NICK COUNTER’S METHODOLOGY is to craftily and contemptuously maneuver the unions into negotiating against themselves and into taking issues off the table just for the promise of AMPTP bargaining, he and the other reps go on and on about how there’s nothing they’d like more than to be partners with SAG.

But the AMPTP is still sending out stealth press releases to media outlets bashing SAG, a tactic used on the WGA as well. Most recently, SAG and the AMPTP sat in negotiations going over the guild’s new media proposals, which SAG had just changed. “And no one even made mention of the press release brutally badmouthing SAG. To get around the media blackout, the AMPTP sent it to company members and didn’t put it on the Web site,” the actors guild member recalled.

Overt acrimony is being kept to a minimum, so the mood is outwardly cordial. Much of that is due to Doug Allen, whose even temper and friendly demeanor is disarming to Nick Counter. Despite his encyclopedic command of contract minutiae and his physically imposing size, which dominates the proceedings, Allen is praised by his colleagues for knowing when to stand down and let others handle areas that are their expertise. For instance, John McGuire, SAG’s senior adviser, based in New York, whose specialty is product integration. “That confidence reportedly comes from Doug dealing with the NFL on multi-multimillion-dollar contracts.”

However, the WGA’s Dave Young was a far better labor organizer. The actors have yet to effectively use YouTube or many of the other PR weaponry available. SAG also has not done a good enough job explaining to members what the guild sees as its leverage. SAG has long felt that pressure from within the shut-down movie industry would beat the AMPTP, because if this is drawn out by employers, then some Oscar-worthy films may not be screened in time for the Academy Awards.

But perhaps SAG should borrow a page from the WGA playbook. It involved CBS Inc boss Les Moonves, who found out that WGA exec director Dave Young had organized a conference to talk to CBS institutional investors about how much the writers strike was costing and how much the corporation was losing as a result.

I’m told that Moonves, who’d just had dinner with Young a few days earlier, called him and said: “David, this will not be helpful to bring in the investor community and tell them your side. I’m asking you to call it off.” But Young would only cancel the confab if Moonves pledged to pressure the rest of the moguls for a quick end to the strike.

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Moonves did, and Chernin and Iger got the media credit. This sort of blackmail is a sound strategy that SAG could use on the Big Media companies this time around. Then the running and screaming will really begin.